Engagement equals productivity

Employee engagement is a trusted motivational tool, yet only the most high-profile organisations are truly taking it seriously.

If you were to ask people what it means to get engaged, most would probably glaze over and talk about true love, diamonds and wedding cake. Not Bob Arnold, director of strategy and human capital management at HR consultancy, Chiumento.

Arnold is more likely to define engagement as a beneficial two-way relationship where employees and employers ‘go the extra mile’ for one another. Companies that get it right reap the rewards and so do their employees, he said.

The benefits of having happy staff are well-documented. But the challenge for many organisations is showing that engagement brings a tangible return on investment – a process many companies find elusive.

“Engagement means different things to different people,” Arnold said. “There was a risk that it would become just another buzzword, so settling on a definition gave us a lot of debate.”

With this in mind, Arnold embarked on a study with Personnel Todayto find out what engagement meant to professionals in different organisations. The study, called Get Engaged, measured engagement levels and whether companies felt they were making progress.

The results, drawn from a survey of 400 HR professionals conducted via the Personnel Today website, are surprising. One in four organisations admitted that staff were not engaged. A similar number said the situation had worsened in the past year. And 44 per cent said that tackling engagement was an overwhelming challenge.

“While many claim to be actively tackling the issue, it is worrying that a significant number don’t know where to start,” Arnold said. “But if you don’t know where you are, it’s difficult to know where to go.”

Asda topped the list of companies most admired for its abilities to engage staff, followed by Microsoft and Virgin companies. But manufacturing and retailing rank staff engagement lower than any other sector.

“The bigger companies have the money to spend on engagement and publicity,” Arnold said. “But I don’t decry the PR because it’s good that the importance of engagement is highlighted.”

Board directors appear to have their heads in the clouds, according to the research, with 69 per cent believing that engagement levels in their organisations had increased in the past 12 months. Only 38 per cent of HR managers agreed with them.

This difference might be because directors rarely come into direct contact with the feelings of employees on the shop floor, instead basing their opinions on the feelings of managers with whom they have regular or day-to-day contact.

A more likely theory might be that directors are overly optimistic because they base their opinions on what they are told. Sometimes, junior managers feed them an overly rosy picture of company life in an attempt to show all is well.

Some obstacles to engagement included lack of time (48 per cent), lack of knowledge (40 per cent) and proving return on investment (40 per cent). But poorly skilled line managers were seen as the biggest barrier, with 50 per cent of HR managers saying it was a problem.

Arnold said such a response was understandable, but he warned that line managers are an easy target. They are, he said, often unfairly blamed and are expected to have a sixth sense when it comes to influencing an organisation’s culture.

“Putting in a new manager will change the level of engagement, but it could rise or fall. We should be concentrating on better communication and coaching our managers to do what they do best, while addressing their problem areas.”

Measuring the benefits of engagement can be especially hard for some organisations. Better job performance tops the list of benefits, but some firms do not measure engagement at all. Others mistakenly measure levels of absenteeism.

“Measuring engagement by looking at absenteeism levels is like looking in the rear-view mirror while you are driving a car,” Arnold said. “It tells you where you’ve been rather than where you’re going.”

Other popular measures include staff turnover (67 per cent), staff opinion surveys (60 per cent) and achievement of targets (42 per cent). But, Arnold said, the biggest benefit of engagement is the value added per employee.

High staff turnover rates in the retail sector, for example, mean most employees never stay long enough to get engaged. Similarly, the spectre of job losses means building engagement in a manufacturing company can be a big challenge.

Arnold said despite the efforts of the HR managers, no one will stay engaged in the same job forever. The level of engagement will wax and wane, he said.

A third of respondents said engagement levels were static. And where levels had fallen, just 48 per cent of firms were doing something about it. But part of the problem could be that some engagement programmes are too rigid. “There’s no easy quick fix,” Arnold said. “It’s an ongoing process and if one programme provided the solution then someone would have patented it and be making a fortune by selling it.

“My belief is that engagement cannot be addressed by a mechanistic approach,” he said. “Each situation is different and it comes back to the fact that employers and employees must support each other.”

Six out of 10 companies in Chiumento’s study claim that over half of their staff are engaged. This rises to 68 per cent among small firms, but is only 54 per cent in those with more than 10,000 staff. The retail sector fares particularly badly. Only 47 per cent think more than half of their staff are engaged compared with 58 per cent in government, education and health, 62 per cent in professional services and 60 per cent in banking/finance.

Getting engaged

Chiumento defines engagement as a positive, two-way relationship between an employee and their organisation. Both parties are aware of their own and the other’s needs, and support each other to fulfil these needs. Engaged employees and organisations ‘go the extra mile’ for one another and both reap mutual benefits.